Roblox | RBLX
Updated
Roblox Corporation encountered some challenges earlier this year, but now performing exceptionally well. The mobile gaming company has a number of long term catalysts for growth, including the move into advertising. My investment outlook remains optimistic due to its steady growth
In its Q1 2024 earnings report, Roblox mentioned encountering problems with low-end Android phones. The introduction of a significant amount of new technology resulted in decreased performance on these devices, leading to reduced usage.
Roblox reported Hours Engaged for the quarter were up to 16.6 billion, but the growth rate dipped to only 15%. After getting over the tough comps the Covid boost, the company had successfully boosted growth back above 20% before the weak numbers for the March quarter.
During the Q1 2024 earnings call, CEO David Baszucki mentioned that the company had addressed some of the technology issues, evidenced by a rebound in traffic in April. He discussed the signs of this improvement as follows: "And I want to highlight, over the last -- really the last half of April and the first half of May, we have seen USA and Canada bookings, DAUs and hour growth come back to north of 20%"
The market reacted negatively, causing the stock to plummet from $40 to $30 overnight. However, there are now indications that Roblox has significantly increased its traffic, recently achieving a growth rate of 28%, well above previous levels.
The recent release of the Despicable Me 4 Heist Obby game has already garnered over 7 million visits. According to Variety, games on Roblox are contributing to box office ticket sales, demonstrating the significant influence of the mobile gaming platform.
All of these data points suggest that Roblox will report strong Q3 traffic numbers. However, the main focus will likely be on the growth in bookings. It's reasonable to infer that low-end Android phones, which are more common outside the U.S., could impact monetization rates, as these rates are significantly lower in those regions.
As emphasized in Roblox's Q1 earnings report, advertising represents a significant growth opportunity moving forward, although its full impact is expected in 2025 and beyond. Current consensus estimates are overly conservative, as digital advertising is anticipated to drive an acceleration in growth rates in the future.
With a market cap of just $26 billion, Roblox becomes an attractive investment, especially with bookings projected to exceed $5 billion and $6 billion in the coming years. Despite some investors' concerns over reported losses and stock-based compensation, the company remains highly profitable due to the nature of its bookings process.
next targets are 43, 45 and 47$
whats your idea about RBLX, bullish, bearish or moonish?
In its Q1 2024 earnings report, Roblox mentioned encountering problems with low-end Android phones. The introduction of a significant amount of new technology resulted in decreased performance on these devices, leading to reduced usage.
Roblox reported Hours Engaged for the quarter were up to 16.6 billion, but the growth rate dipped to only 15%. After getting over the tough comps the Covid boost, the company had successfully boosted growth back above 20% before the weak numbers for the March quarter.
During the Q1 2024 earnings call, CEO David Baszucki mentioned that the company had addressed some of the technology issues, evidenced by a rebound in traffic in April. He discussed the signs of this improvement as follows: "And I want to highlight, over the last -- really the last half of April and the first half of May, we have seen USA and Canada bookings, DAUs and hour growth come back to north of 20%"
The market reacted negatively, causing the stock to plummet from $40 to $30 overnight. However, there are now indications that Roblox has significantly increased its traffic, recently achieving a growth rate of 28%, well above previous levels.
The recent release of the Despicable Me 4 Heist Obby game has already garnered over 7 million visits. According to Variety, games on Roblox are contributing to box office ticket sales, demonstrating the significant influence of the mobile gaming platform.
All of these data points suggest that Roblox will report strong Q3 traffic numbers. However, the main focus will likely be on the growth in bookings. It's reasonable to infer that low-end Android phones, which are more common outside the U.S., could impact monetization rates, as these rates are significantly lower in those regions.
As emphasized in Roblox's Q1 earnings report, advertising represents a significant growth opportunity moving forward, although its full impact is expected in 2025 and beyond. Current consensus estimates are overly conservative, as digital advertising is anticipated to drive an acceleration in growth rates in the future.
With a market cap of just $26 billion, Roblox becomes an attractive investment, especially with bookings projected to exceed $5 billion and $6 billion in the coming years. Despite some investors' concerns over reported losses and stock-based compensation, the company remains highly profitable due to the nature of its bookings process.
next targets are 43, 45 and 47$
whats your idea about RBLX, bullish, bearish or moonish?
Trade active
Roblox’s increasing penetration in user base between nine and 12 years holds promise. RBLX’s developer community’s focus on providing good content, featuring better visuals and effects, and continued market penetration is expected to drive first-quarter results.
Trade active
we hit our first target
Trade active
47$ is a big resistance
Trade active
RBLX pumped 22% last week following the release of its third quarter earnings report, which surpassed expectations and signified a key milestone for the company
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.